Agriculture remains the bedrock of Nigerian economy generating about 70% of employment and constituting over 40% of the Gross Domestic Product {GDP} of the country.
The country has a land area of 98.3m hectares. At present about 34m hectares or 48% are under cultivation leaving a good portion uncultivated. There is no doubt that considering the vast area of uncultivated land coupled with the natural fertility of its soil, Nigeria has great agricultural potentials.
To say then, that Nigeria’s economy is agrarian does not mean that Nigeria is agriculturally advanced. Peasant farming characterizes agricultural practice in Nigeria. Farming families engage in subsistence farming in which family needs determine the scale of production and wherein small plots of land are cultivated by individual owners or sub-owners following age-old methods without much control on the yields. Family farming uses mainly family labor which could be augmented with minor hiring of labor and labor exchanges with other farmers at peak seasons.
The essential factors of production – land, labor, and capital are provided within the family. This system does not make adequate use of modern farming techniques, capital input, advisory services and market information. The technology of production is not modern and involves a lot of drudgery. Also there is the problem of lack of or inadequate infrastructural facilities. This type of peasant agriculture involves 95% of Nigerian farmers, while farmers employed on corporate and government supported large-scale farms account for only 5 percent.
In the recent past, investment in the support services to Nigerian agriculture has been neglected with the result that this sector has not realized its full potential to contribute to the prosperity and economic development of the country.
Meanwhile, increasing population pressure and the accompanying need to intensify agricultural production is leading to erosion of the natural resource base on which agriculture depends. The sustainability of production is threatened by a vicious cycle of declining soil fertility and increasing problems of pests, diseases, and weeds. Moreover, the lack of knowledge on how to add value through proper storage, processing, and marketing impedes agricultural growth.
Promising technologies exist to address these problems, but their adoption is constrained by a lack of funds amongst other challenges.
This situation therefore presents a viable opportunity for government and savvy investors to take advantage of the opportunity presented by leasing agricultural equipment in Nigeria.
Some of the equipment that can be leased includes
• Tractors
• Processing Equipments
• Storage Facilities
Some of the incentives the government has put in place to encourage investment in the agricultural sector in Nigeria includes
o Finance Credit
o Tax Holdings
o Reduced Customs Charges on Imported Inputs
o Technical Support through Research Institutions
o Export Financing and Guarantee
o Agricultural Insurance Scheme
o Extension Services
Government also needs to increase its presences in the area by providing cheap loans through the Bank of Agricultural and other financial institutions in the Agricultural sector in Nigeria.
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